ABOUT AFFILIATE PROGRAMS & THIS PROGRAM

1. What is an affiliate program?

Affiliate marketing is a method of connecting buyers to sellers, and rewarding those who encourage those connections. Affiliate programs (sometimes known as associate programs) allow anyone with a website to earn commissions by simply encouraging their visitors to link onto another website and buy a product or service. The referring website owner (the 'affiliate') places banners, buttons or text links on their website, and is paid a percentage of each sale made. The company offering the program delivers the product or service, collects the customer payment and takes care of all of the other customer service involved.

In other words if you sign up to an affiliate program and add a link to your website, each time a visitor transfers from your website to the merchant website via this link and buys you will receive part of the sales income as commission. That's it. There's no catch.

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2. Are affiliate programs popular?

According to the web historians (!) Amazon.com invented online affiliate relationships way back in July 1996. Since then it has exploded beyond everyone's wildest imagination. Millions off affiliates send billions of visitors to tens of thousands of merchants in return for payment. Amazon alone now have some 600,000 affiliates (Amazon call them associates) in their program. In the UK an example often used is Holidayautos.co.uk, who have around 2,000 websites linking into them. (Which on it's own is not a bad business, given that they charge affiliates £100 to join!).

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3. How do affiliate programs differ from pay-per-click banner advertising?

Pay-per-click banner ads are usually short-term relationships where there is a buyer (of the space - usually specific space) and a seller. The banners are similar to traditional adverts on commercial television. Much recent research shows response rates from banners falling (average click through rates are now less than 0.5%).

Affiliate programs are an ongoing relationship between an affiliate and a merchant. In addition to an ongoing relationship, the key differences are relevance and control.

Relevance - although affiliate programs use banners and buttons, these are placed next to relevant content. Typically the product sold by the merchant ties in closely with the affiliates website content (so, for example, TravellersSOS typically partners with travel-related websites). Affiliate programs also use links and 'personal' recommendations, which are stronger because the recommendation comes from a 'relevant' website. Affiliate programs can therefore generate higher click-throughs, higher sales and higher income (click-through rates of 5-10% are more typical).

Control - whereas the buyer of the space is in control for pay-per-click, in affiliate relationships the affiliate is much more in control. They decide how and where to include a link (or links). And if an advertisement is not working for them, they can decide to delete it.

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4. I usually work with 'pay-per-click' advertisers rather than 'pay-per-sale'?

Right now (late 2001) 62% of online advertising is performance based (Forester Research). Just about every website has unsold banner or newsletter space. With 74% of online advertising unsold it makes sense to use pay-per-sale advertising as a filler for pay-per-click ads, in order to increase your revenues.

In addition, an article published by the online marketing news website 'Clickz.com' examined pay-per-click vs. pay-per-sale from a affiliates point of view. The conclusion? If you send targeted visitors you'll earn more from pay-per-sale.

You can find the article at: http://www.clickz.com/design/pub_comm/article.php/830281.

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5. Why should I join an affiliate program?

Affiliate programs have gained rapid acceptance because of their ease of implementation - driving traffic to a merchant partner is far easier than becoming a merchant yourself! It's also a low risk activity. If after a couple of months you find that you don't generate sales with a merchant you can always remove the link.

Affiliate programs require little effort to get started and have an almost zero running cost, but can produce a real boost to income. And a good affiliate program is a win-win. You direct your visitors to a product that is relevant to them, increasing their loyalty to you, and when they buy the merchant will pay you, increasing your bottom line. A classic win-win!

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